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Translation of the

CORPORATE GOVERNANCE CODE FOR COMPANIES LISTED IN MARKETS

REGULATED BY THE QATAR FINANCIAL MARKETS

AUTHORITY

Issued by the Board of Directors of the Authority in its first Meeting for the

year 2009

on January 27, 2009

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Table of Contents

SECTION 1 : PREAMBLE, DEFINITIONS, AND SCOPE 4

Article 1 : Definitions 7

Article 2 : Scope and Principle of “Comply or Explain” 11

SECTION II : COMPLIANCE WITH CORPORATE GOVERNANCE 11

Article 3 : Company‟s Obligation to comply with Corporate Governance

Principles

11

SECTION III : THE BOARD OF DIRECTORS 11

Article 4 : Board Charter 11

Article 5 : Board Mission and Responsibility 12

Article 6 : Board Members ‟ Fiduciary Duties 12

Article 7 : Separation of Positions of Chairman and CEO 13

Article 8 : Duties of the Chairman of the Board 13

Article 9 : Board Composition 14

Article 10 : Non-Executive Board Members 14

Article 11 : Board Meetings 15

Article 12 : Board Secretary 15

Article 13 : Conflict of Interests and Insiders‟ Trading 15

Article 14 : Other Board Practices and Duties 16

Article 15 : Board Members Appointment. The Nomination Committee 17

Article 16 : Board Members‟ Remuneration - Remuneration Committee 18

Article 17 : Audit Committee 18

SECTION IV : INTERNAL CONTROLS 21

Article 18 : Compliance, Internal Controls and the Internal Auditor 21

SECTION V : EXTERNAL AUDITOR 22

Article 19 : External Auditor 22

SECTION VI : DISCLOSURE 23

Article 20 : The Corporate Governance Report 23

SECTION VII : SHAREHOLDERS RIGHTS 23

Article 21 : General Rights of Shareholders and Key Ownership

Elements

23

Article 22 : Ownership Records 24

Article 23 : Access to Information 24

Article 24 : Shareholders‟ Rights with Regard to Shareholders‟ Meetings 24

Article 25 : Equitable Treatment of Shareholders and Exercise of Voting

Rights

25

Article 26 : Shareholders‟ Rights Concerning Board Members‟ Election 25

Article 27 : Shareholders‟ Rights Concerning Dividend Distribution 25

Article 28 : Capital Structures, Shareholders‟ Rights, Major Transactions 25

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SECTION VIII : STAKEHOLDERS RIGHTS 26

Article 29 : Stakeholders‟ Rights 26

SECTION IX : CORPORATE GOVERNANCE REPORT 26

Article 30 : The Corporate Governance Report 26

SECTION X : CODE ENFORCEMENT 28

Article 31 : Code Enforcement 28

Annex 1 Guiding Criteria for Board members nomination

Annex 2 Board Charter Model

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SECTION 1: PREAMBLE, DEFINITIONS, AND SCOPE

This Corporate Governance Code has been developed for

Joint Stock Companies listed on any stock market that is subject to

the regulation of the Qatar Financial Markets Authority (the CG

Code, or this Code). This Code comprises principles and practices

to improve the quality of governance especially at the Board level.

This is a pre- requisite for improving the performance of any

company.

The CG Code has been drafted taking into account

International best practices for Corporate Governance, including

but not limited to those developed by the Organization for

Economic Cooperation and Development (OECD), the Bank for

International Settlements (BIS), the International Corporate

Governance Network (ICGN) and the International Institute of

Finance (IIF), and adapting those provisions to the local conditions

of the state of Qatar and Qatar‟s existing Commercial Companies

Law and Stock Market Regulations.

The OECD defines Corporate Governance as “the system by

which business corporations are directed and controlled. The

corporate governance structure specifies the distribution of rights

and responsibilities among different participants in the corporation,

such as, the Board, managers, shareholders and other stakeholders,

and spells out the rules and procedures for making decisions on

corporate affairs.” 1

Both the OECD principles and the other codes broadly deal

with five elements of corporate governance: (1) minority

shareholders protection; (2) responsibilities of the Board of

Directors; (3) accounting and auditing; (4) transparency of

ownership and control; and (5) the regulatory environment. The

emphasis in the revised 2004 OECD Principles of Corporate

Governance, is on corporate governance as an essential component

of management of risk that may be faced by stakeholders

especially shareholders (risk of shirking, laxity and extraction of

personal benefits).

1 The OECD Principales of Corporate Governance developed in 1998

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When a Shareholder buys a company‟s shares, he expects to

get compensated for the cost he incurs, in the form of reasonably

high dividends, and or capital gains through selling his shares at a

good premium (sell them at a price much higher than the buying

price). But the levels of dividends and capital gains depend on the

performance of the company and to what extent it has been, and

will be successfully and honestly managed. That depends to a very

large extent on the behavior of those to whom the Shareholders

entrust the management of the company on their behalf; the

members of the Board of Directors.

Shareholders delegate to the Board of Directors the power to

manage the company on their behalf because it is practically

impossible to manage the company by holding meetings involving

all the shareholders. The Board members on their part delegate

taking day-to-day decisions to Executive Managers.

This delegation of powers generates asymmetries of

company control, information and opportunities. Executive

Managers have more control over the management of the company

than the Board members and Shareholders and they have, as well,

more information about the plans and operations of the company

than the board members and Shareholders. And Board members

have more control and information about the plans and operations

of the company than ordinary Shareholders. The possession of

more control and more information generates opportunities for

using such control and information for obtaining personal benefits

at the expense of Shareholders. And so such asymmetries expose

the Shareholders to high risks of shirking and lax performance by

Board members and Executive Managers; as well as using

information and power for personal benefits at the expense of

Shareholders.

Executive Managers are supposed to prepare and propose

plans for running the company to the Board of Directors for review

and scrutiny, and implement what the Board approves. And the

Board is supposed to monitor closely the implementation of such

plans and hold Executive Managers accountable for performance

results. But if the Board puts the wrong people in executive

management positions or shirks and fails to scrutinize plans

properly or monitor performance effectively, Executive Managers

may prepare bad plans or betray their responsibilities, by failing to

work actively or effectively and efficiently to produce good results.

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Therefore, in order to manage the said risks, shareholders should

select the right people to the Board of Directors and monitor their

performance closely and hold them accountable. And the Board of

Directors on its part should select and appoint the right people in

the top executive management positions and monitor their

performance closely and hold them accountable.

In addition to the risks of shirking and betrayal of

responsibilities, lax monitoring by the shareholders or board

members may encourage dishonest behavior and obtaining

personal benefits at the expense of Shareholders:

Those in control might employ their non-deserving relatives

and friends in well paying positions in the company;

Executive Managers and Board members might overpay

themselves in the form of high salaries, high directors fees,

allowances, bonuses and other benefits;

Executive Managers, Board members and large Shareholders,

might enter, directly or indirectly, into commercial

transactions with the company at terms less favorable than the

market terms with respect to prices, or quality or terms of

payment etc;

Those who have information, that has not been disclosed to

the public, about the plans and operations of the company,

might use such information to buy or sell the company shares

and make gains or avoid losses at the expense of other

Shareholders;

Some elements of executive management, Board members and

large Shareholders might collude to exchange benefits and

ensure mutual protection at the expense of the rest of

Shareholders;

Those in control might conceal information or give misleading

information so as to cover-up shirking or personal benefits;

The external auditors, who are supposed to review and verify

the information provided by management with respect to

correctness and adequacy, might fail to do their job properly if

they have non-audit interests in the company, or if they want

to cover up mistakes they made in the past or they are biased

because of a strong commercial, social or professional

relationship with the company or management.

The main objective of this Code is to make investors aware

of such risks, remind them constantly of them, and propose

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measures as to how the above risks can be managed. The Authority

would expect full awareness of the above risks to enable the

shareholders to apply the measures proposed in this Code more

efficiently as well as other measures that they may develop.

The present CG Code addresses existing corporate

governance deficiencies and in particular provides a

comprehensive corporate governance framework for the companies

subject to the authority of the QFMA. This code covers the

composition and structure of the Board of Directors, the duties and

responsibilities of the Board, its Chairman and the Board Secretary.

The Code contains provisions to protect the rights of shareholders

and in particular minority shareholders, as well as the stakeholders.

It also covers various Committees constituted by the Board of

Directors noting that delegation of duties to the said committees

does not absolve the Board members of their responsibilities.

These provisions emphasize strengthening the internal controls

within the company. They also include measures for enforcing the

requirements of this Code. The CG Code addresses a number of

specific issues:

o Applying the “One-share, One-vote” principle universally

among shareholders, irrespective of the number of shares

they own;

o Requiring shareholders approval of capital changes, i.e.

takeovers, mergers, buyouts, and capital increases;

o Defining “independent” and “non-executive” Board

members;

o Requiring independent and non-executive Board members

to be elected to the board;

o Assigning to the audit committee the responsibility to

monitor risk factors

o Improving financial disclosure and transparency

requirements and proposing the adoption of International

Financial Reporting Standards (IFRS); and

o Requiring development of a „Related Party Policy‟ to

regulate transactions between the company and related

parties such as Board members, large shareholders and

executive management so as to address conflict of

interests.

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Article 1- Definitions

Access to Information

Procedures

The Procedures to be adopted by each

company allowing shareholders to obtain

information as prescribed under this Code.

Accessible Company

Information

Documents and information of the Company,

that should be made available to shareholders

or such information and documents that may

be obtained by shareholders. The said

information should include at least documents

required by law or by this Code to be made

available to shareholders. The Company shall

take into consideration when determining

whether information should be made available

or accessible, the resources of the Company

that would have to be devoted to allowing

access to such information and the potential

damage to the Company and shareholders of

releasing proprietary and confidential

information.

Affiliated Company With respect to a company, a company

belonging to the same group of companies.

Group Companies

Company and Companies controlled by the

Company as per the definition of “control” set

out by the International Financial Reporting

Standards.

Authority The Qatar Financial Markets Authority

(QFMA) established by Law No 33/2005.

Board Charter A charter detailing the Board‟s functions and

responsibilities as well as Board Members‟

duties

Board or Board of

Directors

The Board of Directors of any Company.

Board Secretary The person appointed by the Board in

compliance with this Code and in charge of

organizing and coordinating Board and other

corporate matters.

Chairman The Chairman of the Company‟s Board of

Directors.

Company Any joint stock company listed on the market

in Qatar and in general any public company

that is subject to the jurisdiction or authority

of the Authority.

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Corporate Governance

Code

This Code as may be amended by the

Authority from time to time.

Corporate Governance

Report

The Corporate Governance Report is an

annual report of the Company‟s corporate

governance practices signed by the Chairman

of the Board of Directors and submitted to the

Authority as set out in this Code.

Cumulative Voting The voting process for election of Board

Members described as follows: For the

election of Board Members, every shareholder

shall hold a total number of votes equal to the

shareholder‟s total number of voting shares

multiplied by the number of seats to be filled

on the Board. The shareholder shall have the

right to allocate the said total number of votes

to a single Board candidate or distribute

his/her votes amongst such number of

candidates as decided by the said shareholder.

Executive Board

Member

A Board Member who performs executive

management duties for the Company and/or is

full-time employee of the Company

External Auditor An audit professional who performs an audit

of the financial statements of a Company, and

who is independent of the Company being

audited

General Assembly The general meeting of the Company‟s

shareholders.

Independent Board

Member

The Independent Board Member is the

Member who is not under the influence of any

factor that may limit his/her capacity to

consider, discuss and decide on the

Company‟s matters in an unbiased and

objective manner (on the basis of facts only).

By way of illustration and without

prejudice to generality, a Board Member shall

be considered non-independent in any of the

following situations :

1- If he or she is currently, or has been

during the last three years:

a- An employee of the Company; and this

includes senior executive management;

or

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b- An employee or Board Member or owner

or partner or a large shareholder of a

consultant to the Company (and the

consultant shall include the external

auditor of the Company);or

c- An employee of a legal entity where a

senior executive manager of the

company or anyone of his relatives or

any other person who is under the

control of either of them; is a member of

the board of directors, or a senior

executive manager, or a large

shareholder of that legal entity.

And for the purposes of this Code a

person is considered to be a large

shareholder if he holds 10% or more of

the voting shares of a company.

- 2- If he is a relative of a senior executive

manager of the Company.

- 3- If he or anyone of his relatives, has

currently or within the last three

years, direct or indirect

substantial commercial or financial

transactions with the Company.

- 4- If he is currently receiving or has received

during the last three years a

substantial compensation from the

Company other than the compensation

that he receives as a Board Member

(The term “substantial” is defined as

set forth in this Code).

- 5- If he has been a Member of the Company‟s

Board for more than nine consecutive

years.

Senior Executive

Management

Internal Control

Senior Executive Management as used in this

Code shall mean the Chief Executive Manager

and the other Executive Managers reporting

directly to him.

Internal audit, budget and other procedures

referred to in section IV of this Code.

Major Transaction Any transaction or series of linked or related

transactions to acquire, sell, lease, exchange,

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or otherwise dispose of (otherwise than by

way of creating a charge) assets of the

Company or assets to be acquired by the

Company or: (a) Which would change the essential nature

of the business of the Company; or

(b) In respect of which the gross value is in

excess of 10% of the lesser of either the

Company‟s market value (in case of a

listed company) or the net value of the

Company‟s assets.

Market:

Any securities market subject to the regulation

of the Authority including the Doha Security

Market and the Qatar Securities Market

Company.

Non-Executive Board

Member

A Board Member who is not in charge of

executive management duties in the Company

and is not dedicated to the Company full time

and who does not receive monthly or yearly

remuneration from the Company other than

the remuneration he receives as a Board

Member.

Parent Company

A company that controls another company

and/or owns more than 50% of the voting

shares of another company.

Related Party

A person is considered to be a Related Party

to the Company if he:-

(a) Is a Member of the Board of Directors

of the Company or an Affiliated

Company.

(b) Is a Member of the Senior Executive

Management of the Company.

(c) Owns or controls 10% or more of the

voting shares in the Company or any of

its Affiliated Companies.

(d) Is a relative of any of the natural

persons mentioned in paragraphs (a),

(b) and (c) above.

(e) Is a company in which the natural

persons mentioned in paragraphs (a) to

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(d) above own jointly or individually

20% or more of its voting shares; or a

director, CEO or a key officer of such

Company.

(f) Is an Affiliated Company or a Parent

Company of the Company.

Relative(s) means in relation to any person any relative of

such person up to the fourth degree.

Shareholder Every person (legal or natural) holding shares

in the Company.

Stakeholder Every person (legal or natural) having an

interest in the Company including for example

shareholders, employees, creditors, clients,

customers, suppliers and investors.

Subsidiary A company that is controlled by another

company or whose capital is more than 50%

owned by another company.

Tag Along Right

the minority shareholders‟ right to participate

in a major sale of shares or a public offering

and to sell their shares on the same terms and

conditions.

Substantial

Commercial or

Financial Transactions

Commercial or Financial Transactions shall

be deemed “substantial” if the total value of

the transactions of the same nature (for

example distribution of products, or import of

goods etc…) reaches in the same year 10% or

more of the average of the total annual

transactions of the same nature executed with

the Company over the last three years (i.e. the

result obtained by dividing the sum of the

total transactions over the last three years by

three to obtain the “average” for one year.)

Article 2 - Scope and Principle of “Comply or Clarify”

2.1 The provisions of this Code shall apply to all

joint-stock companies listed on any stock market

that is subject to the regulation of the Qatar

Financial Markets Authority.

2.2 This Code is based on the principle of comply,

or explain the reasons for non-compliance.

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Companies are required to disclose the extent to

which they comply with the provisions of this

Code. Where a Company does not comply with

any provision of this Code, it must identify such

provision or article that is not complied with,

and justify and explain the reasons and rationale

behind its non compliance therewith. Such

clarification should be included in the Corporate

Governance Report as per the disclosure

mechanism set out in this Code, and in such a

way enabling the shareholders and the general

public to evaluate the Company‟s commitment

to this Code and to corporate governance in

general.

SECTION II – COMPLIANCE WITH CORPORATE

GOVERNANCE

Article 3 - Company’s Obligation to comply with Corporate

Governance Principles

3.1 The Board shall ensure that the Company

complies with the principles set out in this Code.

The Board shall also review and update its

corporate governance practices, and regularly

review the same.

3.2 The Board shall regularly review and update

professional conduct rules setting forth the

Company‟s corporate values and other internal

policies and procedures all of which shall be

binding upon the Members of the Board of

Directors and the Company‟s staff as well as

the Company‟s advisors (These professional

conduct rules may include but are not limited to

the Board Charter, audit committee‟s charter,

company regulations , related party transactions

policy and insider trading rules ). The Board

should review these professional conduct

principles regularly so as to ensure they reflect

best practices and they meet the needs of the

Company.

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SECTION III- THE BOARD OF DIRECTORS

Article 4 - Board Charter

The Board shall make sure that the Company adopts a

Charter for the Board of Directors detailing the Board‟s

functions and responsibilities as well as the Board Members

duties which shall be fulfilled by all Board Members. The

said Board Charter shall be drafted to comply with the

provisions of this Code, and shall be based on the Board

Charter annexed to this Code and as may be amended from

time to time by the Authority. The said Board Charter shall

be published and made available to the public.

Article 5- Board Mission and Responsibilities:

5.1 The Company shall be managed by an effective Board

of Directors which shall be individually and

collectively responsible for the proper management of

the Company.

5.2 In addition to the Board functions and responsibilities

as set out in the Board Charter, the Board shall be

responsible for:

5.2.1 Approving the Company‟s strategic objectives,

appointing and replacing management, setting forth

management compensation, reviewing management

performance and ensuring succession planning

concerning the Company‟s management.

5.2.2 Ensuring the Company‟s compliance with related laws

and regulations as well as the Company‟s articles of

association and by-laws. The Board is also responsible

for protecting the Company from illegal, abusive or

inappropriate actions and practices.

5.3 The Board may delegate some of its functions and

constitute special committees, for the purpose of

undertaking specific operations on its behalf. In this

case written and clear instructions shall be given

concerning the delegated function or authority with the

requirement to obtain the Board‟s prior approval on

specific matters. In any event, and even where the

Board delegates one of its functions or authorities, the

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Board remains liable for all of its functions or

authorities so delegated.

Article 6 - Board Members ’ Fiduciary Duties

6.1 Each Board Member owes the Company the fiduciary

duties of care, loyalty and compliance with the rules

set out in related laws and regulations including this

Code and the Board Charter.

6.2 Board Members must at all times act on an informed

basis, in good faith, with due diligence and care, and

in the best interests of the Company and all

shareholders.

6.3 Board Members shall act effectively to fulfill their

responsibilities towards the Company.

Article 7 - Separation of Positions of Chairman and CEO

7.1 The same person may not hold or exercise the positions

of Chairman and Chief Executive Officer at the same

time. The division of responsibilities between the two

positions shall be clear.

7.2 In all circumstances, no one person in the Company

should have unfettered powers to take decisions.

Article 8 - Duties of the Chairman of the Board

8.1 The Chairman is responsible for ensuring the proper

functioning of the Board; in an appropriate and

effective manner including timely receipt by the

Board Members of complete and accurate

information.

8.2 The Chairman may not be a member of any of the

Board committees prescribed in this Code.

8.3 The duties and responsibilities of the Chairman of the

Board of Directors shall, in addition to the provisions

of the Board Charter, include but not be limited to the

following:

8.3.1 to ensure that the Board discusses all the main issues in

an efficient and timely manner;

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8.3.2 to approve the agenda of every meeting of the Board of

Directors taking into consideration any matter

proposed by any other Board Member; this may be

delegated by the Chairman to a Board Member but

the Chairman remains responsible for the proper

discharge of this duty by the said Board Member ;

8.3.3 to encourage all Board Members to fully and

effectively participate in dealing with the affairs of

the Board of Directors for ensuring that the Board of

Directors is working in the best interest of the

Company;

8.3.4 to ensure effective communication with Shareholders

and communication of their opinions to the Board of

Directors; and

8.3.5 to allow effective participation of the Non-Executive

Board Members in particular and to promote

constructive relations between Executive and Non-

Executive Board Members;

8.3.6 to ensure the conducting of an annual evaluation to the

Board‟s performance.

Article 9 - Board Composition

9.1 The Board composition shall be determined in the

Company‟s by-laws. The Board shall include

executive, non-executive and independent Board

Members so as to ensure that the Board decisions are

not dominated by one individual or a small group of

individuals.

9.2 At least one third of the Board Members shall be

Independent Board Members and a majority of the

Board Members shall be Non-Executive Board

Members.

9.3 Board Members shall have adequate expertise and

knowledge to effectively perform their functions in the

best interest of the Company and they shall give

sufficient time and attention to their role as Board

Members.

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Article 10 - Non-Executive Board Members

Section 1.01

10.1 Duties of the Non-Executive Board Members include but are

not limited to the following:

10.1.1 participation in the meetings of the Board of

Directors and providing independent opinion on

strategic matters, policy, performance, accountability,

resources, key appointments and operation

standards;

10.1.2 ensuring that priority shall be given to the Company‟s

and Shareholders‟ interests in case of conflict of

interests;

10.1.3 participation in the Company‟s Audit Committee;

10.1.4 monitoring the Company‟s performance in realizing

its agreed objectives and goals and reviewing its

performance reports including the Company‟s annual,

half yearly and quarterly reports; and

10.1.5 the development of the procedural rules for the

Company‟s corporate governance for ensuring their

implementation in a consistent manner; and

10.1.6 availing the Board of Directors and its different

Committees of their skills, experiences, diversified

specialties and qualifications through regular

presence in the Board meetings and effective

participation in the General Assemblies and the

acquisition of a balanced understanding of

Shareholders‟ opinions.

10.2 A majority of the Non-Executive Board Members may

request the opinion of an independent consultant, in

relation to any of the Company‟s affairs, at the

Company‟s expense.

Article 11 - Board Meetings

11.1 The Board of Directors shall hold meetings

regularly, so as to ensure that the Board is

effectively performing its duties. The Board shall

meet at least six times during a year.

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11.2 The Board shall meet when convened by its

Chairman or upon the written request of two Board

Members. The invitation for the Board meeting and

agenda shall be communicated to each Board

Member at least one week before the date of the

meeting, noting that any Board Member may add

any item to the agenda.

Article 12 - Board Secretary

12.1 The Board shall appoint a Board Secretary whose

functions shall include recording the minutes of all

the Board meetings and safekeeping records, books

and reports submitted by or to the Board. Under the

direction of the Chairman, the Board Secretary shall

also be in charge of ensuring timely access to

information and coordination among the Board

Members as well as between the Board and the

other stakeholders in the company including

shareholders, management, and employees.

12.2 The Board Secretary shall ensure that Board

Members have full and timely access to the minutes

of all Board meetings, information, documents, and

records pertaining to the Company.

12.3 All Board Members shall have access to the

services and advice of the Board Secretary.

12.4 The Board Secretary may only be appointed or

removed by a Board resolution.

12.5 The Board Secretary should preferably be a

member of a recognized body of professional

accountants, or a member of a recognized or

chartered body of corporate secretaries, or a lawyer

or a graduate from a recognized university or

equivalent. He should have at least three years

experience of handling the affairs of a public

company listed in the market..

Article 13 - Conflict of Interests and Insider Trading

13.1 The Company shall adopt and make public general

rules and procedures governing the Company‟s

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entering into any commercial transaction with a

Related Party (the Company‟s “Related Party

Policy”). In any event, it shall not be permitted to

enter into any commercial transaction (or contract)

with any a Related Party unless in strict compliance

with the aforementioned Related Party Policy. The

said policy shall include principles of transparency,

fairness and disclosure in addition to the

requirement that a related party transaction be

approved by a majority vote of the shareholders,

without the concerned Related Party participating in

the voting.

13.2 Whenever an issue involving conflict of interests or

any commercial transaction between the Company

and any of its Board Members or any Party related

to said Board Member, is discussed in a Board

meeting, the said issue shall be discussed in the

absence of the concerned Board Member who may

not in any event participate in the voting on the

matter. In any event, such transaction shall be made

at market prices and on arm‟s length basis and shall

not involve terms that are contrary to the interests

of the Company.

13.3 In any event, such transactions shall be disclosed in

the Company‟s annual report and specifically

referred to in the General Assembly following such

commercial transactions.

13.4 Trading by Board Members‟ in the Company‟s

shares and other securities shall be disclosed and

the Company shall adopt clear rules and procedures

governing trading by Board Members and

employees in the company securities.

Article 14 - Other Board Practices and Duties

14.1 Board Members shall have full and immediate

access to information, documents, and records

pertaining to the Company. The Company‟s

executive management shall provide the Board and

its committees with all requested documents and

information.

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14.2 The Board Members shall ensure that the

Nomination, Remuneration and the Audit

Committee members, the Internal Audit and

representatives of the External Auditors attend the

General Assembly.

14.3 The Board shall put in place an induction program

for newly appointed Board Members in order to

ensure that, upon their election, Board Members are

made fully aware of their responsibilities, and have

proper understanding of the manner in which the

Company operates.

14.4 The Board Members are responsible for

having an appropriate understanding of their role

and duties, and for educating themselves in

financial, business, and industry practices as well as

the Company‟s operations and functioning. In this

respect, the Board shall adopt an appropriate formal

training to enhance Board Members‟ skills and

knowledge.

14.5 The Board of Directors shall at all times keep its

Members updated about the latest developments in

the area of corporate governance and best practices

relating thereto. The Board may delegate the same

to the audit committee or the governance committee

or any other body as it deems appropriate.

14.6 The Company‟s articles of association shall include

clear procedures for removing Board Members in

the event of failing to attend Board meetings.

Article 15 - Board Members Appointment. The Nomination

Committee

15.1 Nominations and appointments of Board Members

shall be made according to formal, rigorous and

transparent procedures.

15.2 The Board shall constitute a Nomination

Committee chaired by an Independent Board

Member and comprised of Independent Board

Members which shall recommend Board Members‟

appointments and re-nomination for election by the

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General Assembly (for the avoidance of doubt,

nomination by the Committee does not deprive any

shareholder of his rights to nominate or to be

nominated);

15.3 Nominations shall take into account inter alia the

candidates‟ sufficient availability to perform their

duties as Board Members, in addition to their skills,

knowledge and experience as well as professional,

technical, academic qualifications and personality

and should be based on the „Fit and Proper

Guidelines for Nomination of Board Members‟

annexed to the Code as amended by the Authority

from time to time;

15.4 Upon its establishment, the Nomination Committee

shall adopt and publish its terms of reference

explaining its authority and role.

15.5 The Nomination Committee‟s role shall also

include conducting an annual self-assessment of the

Board‟s performance.

15.6 Banks and other companies shall comply with any

conditions or requirements relating to the

nomination, election or appointment of Board

Members issued by Qatar Central Bank or any other

relevant authority.

Article 16 - Board Members’ Remuneration - Remuneration

Committee

16.1 The Board of Directors shall establish a

Remuneration Committee comprised of at least

three Non-Executive Board Members the majority

of whom must be Independent.

16.2 Upon its constitution, the Remuneration Committee

shall adopt and make available its terms of

reference explaining its role and main

responsibilities.

16.3 The Remuneration Committee‟s main role shall

include setting the remuneration policy of the

Company including remuneration of the Chairman

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and all Board Members as well as Senior Executive

Management.

16.4 The Remuneration Policy shall be presented to the

shareholders in the General Assembly for approval

and shall be made public.

16.5 Remuneration shall take into account the

responsibilities and scope of the functions of the

Board Members and members of Senior Executive

Management as well as the performance of the

Company. Compensation may include fixed and

performance-related components, noting that such

performance related components should be based

on the long-term performance of the Company.

Article 17 - Audit Committee

17.1 The Board of Directors shall establish an Audit

Committee that shall be comprised of at least three

members the majority of whom should be

Independent. The Audit Committee must include

at least one member with financial and audit

experience. If the number of available Independent

Board Members was not sufficient to fill the Audit

Committee membership, the Company may appoint

members that are not Independent Board Members

provided that the Chairman of the Committeeis

Independent.

17.2 In any event, any person who is or has been

employed by the Company‟s external auditors

within the last 2 years may not be a member of the

Audit Committee.

17.3 The Audit Committee may consult at the

Company‟s expense any independent expert or

consultant.

17.4 The Audit Committee shall meet as needed and

regularly at least once every three months and shall

keep minutes of its meetings.

17.5 In the event of any disagreement between the Audit

Committee‟s recommendations and the Board „s

decision including where the Board refuses to

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follow the Committee‟s recommendations

concerning the external auditor, the Board shall

include in the Company‟s Governance Report, a

statement detailing such recommendations and the

reason(s) behind the Board of Directors‟ decision

not to follow the recommendations.

17.6 Upon its establishment, the Audit Committee shall

adopt and make public its terms of reference

explaining its main role and responsibilities in the

form of an Audit Committee Charter including in

particular the following:

17.6.1 to adopt a policy for appointing the External

Auditors; and to report to the Board of Directors

any matters that, in the opinion of the Committee,

necessitate action and to provide recommendations

on the necessary procedures or required action;

17.6.2 to oversee and follow up the independence and

objectivity of the external auditor and to discuss

with the external auditor the nature, scope and

efficiency of the audit in accordance with

International Standards on Auditing and

International Financial Reporting Standards;

17.6.3 to oversee, the accuracy and validity of the

financial statements and the yearly, half-yearly and

quarterly reports , and to review such statements

and reports. In this regard particularly focus on:

1. Any changes to the accounting policies and practices;

2. Matters subject to the discretion of Senior Executive

Management;

3. The major amendments resulting from the audit;

4. Continuation of the Company as a viable going

concern;

5. Compliance with the accounting standards designated

by the Authority;

6. Compliance with the applicable listing Rules in the

Market; and

7. Compliance with disclosure rules and any other

requirements relating to the preparation of financial

reports;

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17.6.4 to coordinate with the Board of Directors, Senior

Executive Management and the Company‟s chief

financial officer or the person undertaking the

latter‟s tasks, and to meet with the external

auditors at least once a year;

17.6.5 to consider any significant and unusual matters

contained or to be contained in such financial

reports and accounts. And to give due

consideration to any issues raised by the

Company‟s chief financial officer or the person

undertaking the latter‟s tasks, or the Company‟s

compliance officer or external auditors;

17.6.6 to review the financial and Internal Control and

risk management systems;

17.6.7 to discuss the Internal Control systems with the

management to ensure management‟s

performance of its duties towards the development

of efficient Internal Control systems;

17.6.8 to consider the findings of principal investigations in

Internal Control matters requested by the Board of

Directors or carried out by the Committee on its

own initiative with the Boards‟ approval;

17.6.9 to ensure ;coordination between the Internal Auditors

and the External Auditor, the availability of

necessary resources, and the effectiveness of the

Internal Controls;

17.6.10 to review the Company‟s financial and accounting

policies and procedures;

17.6.11 to review the letter of appointment of the External

Auditor, his business plan and any significant

clarifications he requests from senior management

as regards the accounting records, the financial

accounts or control systems as well as the Senior

Executive management‟s reply ;

17.6.12 to ensure the timely reply by the Board of Directors

to the queries and matters contained in the External

Auditors‟ letters or reports;

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17.6.13 to develop rules, through which employees of the

Company can confidentially report any concerns

about matters in the financial reports or Internal

Controls or any other matters that raise suspicions.

And to ensure that proper arrangements are

available to allow independent and fair

investigation of such matters whilst ensuring that

the aforementioned employee is afforded

confidentiality and protected from reprisal. Such

rules should be submitted to the Board of Directors

for adoption.

17.6.14 to oversee the Company‟s adherence to professional

conduct rules;

17.6.15 to ensure that the rules of procedure related to the

powers assigned to the Board of Directors are

properly applied;

17.6.16 to submit a report to the Board of Directors on the

matters contained in this Article ;

17.6.17 to consider other issues as determined by the Board

of Directors;

SECTION IV – INTERNAL CONTROL

Article 18 – Compliance, Internal Controls and the Internal

Auditor

18.1 The Company shall adopt Internal Control Systems,

approved by the Board, to evaluate the methods and

procedures for risk management, implementation of

the Company‟s corporate governance code and

compliance with related laws and regulations. And

the Internal Control Systems shall set clear lines of

responsibility and accountability throughout the

Company‟s departments.

18.2 Internal Control Systems shall include effective and

independent risk assessment and management

functions, as well as financial and operational

internal audit functions in addition to the external

audit. The Internal Control Systems shall also

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ensure that all related-party transactions are handled

in accordance with the requirements related thereto.

18.3 The Company shall have an internal audit function

with clearly defined functions and role. In

particular, the internal audit function shall :

18.3.1 audit the Internal Control Systems and oversee

their implementation;

18.3.2 be carried out by operationally independent,

appropriately trained and competent staff; and

18.3.3 Submit its reports to the Board of Directors

either directly or through the Board‟s Audit

Committee; and is responsible to the Board; and

18.3.4 Has access to all Company‟s activities; and

18.3.5 Be independent including being independent

from the day-to-day Company functioning. Its

independence should be reinforced for example

by having the Board determine compensation of

its staff.

18.4 The internal audit function shall include at least one

internal auditor appointed by the Board of

Directors. This internal auditor shall report to the

Board or the Chief Executive Officer of the

Company, either directly or through the Audit

Committee.

18.5 The internal auditor shall prepare and submit to the

Audit Committee and the Board of Directors an

“internal audit report” which shall include a review

and assessment of the Internal Control system of

the Company. The scope of the Internal Audit

Report shall be agreed between the Board (based on

the Audit Committee recommendation) and the

internal auditor and shall include particularly the

following:

- Control and oversight procedures of financial affairs,

investments, and risk management.

- Comparative evaluation of the development of risk

factors and the systems in place to respond to drastic

or unexpected market changes.

- Assessment of the performance of the Board and senior

management in implementing the Internal Control

Systems, including the number of times the Board

was notified of control issues (including risk

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management) and the manner in which such issues

were handled by the Board.

- Internal Control failure, weaknesses or contingencies

that have affected or may affect the Company‟s

financial performance and the procedure followed by

the Company in addressing Internal Control failures

(especially such problems as disclosed in the

Company‟s annual reports and financial statements).

- The Company‟s compliance with applicable market

listing and disclosure rules and requirements.

- The Company‟s compliance with Internal Control

systems in determining and managing risk.

- All relevant information describing the Company‟s

risk management operations.

18.6 The Internal Audit Report shall be prepared every

three months.

SECTION V – EXTERNAL AUDITOR

Article 19 – External Auditor

19.1 An External Auditor who is independent, and

qualified, and appointed upon the recommendation

of the Audit Committee to the Board and the

decision of the Company‟s General Assembly,

shall undertake an annual and semi-annual

independent audit. The purpose of the said audit is

to provide an objective assurance to the Board and

shareholders that the financial statements are

prepared in accordance with this Code, related

laws and regulations and international financial

reporting standards and accurately represent the

financial position and performance of the

Company in all material respects.

19.2 The External Auditor shall comply with the highest

professional standards and he shall not be

contracted by the Company to provide any advice

or services other than carrying out the audit of the

Company. The External Auditor must be

completely independent from the Company and its

Board Members and shall not have any conflict of

interests in his relation to the Company.

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19.3 The Company‟s External Auditor must attend the

Company‟s annual ordinary General Assembly

where he shall deliver his annual report and answer

any queries in this respect.

19.4 The External Auditor is accountable to the

shareholders and owes a duty to the Company to

exercise due professional care in the conduct of the

audit. The External Auditor is also responsible for

notifying the Authority and any other regulatory

authority should the Board fail to take proper

action concerning suspicions raised or identified by

the External Auditors.

19.5 A listed company shall change its External Auditor

every three years at a maximum.

SECTION VI – DISCLOSURE

Article 20 - The Corporate Governance Report

20.1 The Company must comply with all disclosure

requirements including financial reporting as well

as disclosing shareholdings of Board Members,

senior executives and major or controlling

shareholders. The Company must also disclose

information about its Board Members including

notably a resume of each member describing

his/her respective education, profession, other

board seats that they may hold (if any). Names of

the members of various Committees constituted by

the Board as mentioned in Article 5.3, along with

the composition of the committee, should also be

disclosed.

20.2 The Board shall ensure that all disclosure made by

the Company provides accurate and true

information which is not non-misleading.

20.3 The Company‟s financial reports must comply with

IFRS /IAS and ISA standards and requirements. In

addition to stating whether the external auditor

obtained all information needed, the external

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auditor report shall also state whether the

Company conforms to IFRS/IAS and that the audit

has been conducted in accordance with IAS.

20.4 The Company audited financial reports shall be

circulated to all shareholders.

SECTION VII – SHAREHOLDERS RIGHTS

Article 21-General Rights of Shareholders and Key Ownership

Elements

Shareholders have all rights conferred upon them by related

laws and regulations including this Code as well as the

Company‟s by-laws; and the Board shall ensure that

shareholders‟ rights are respected in a fair and equitable

manner.

Article 22- Ownership Records

22.1 The Company shall keep valid and up to date

records of share ownership.

22.2 Shareholders shall have the right to review and

access for free the Company‟s shareholders‟

register at the Company‟s regular office hours or as

otherwise determined in the Company‟s Access to

Information Procedures.

22.3 The Shareholder shall be entitled to obtain a copy

of the following:

22.3.1 Shareholders‟ register,

22.3.2 Board Members‟ register,

22.3.3 Articles of Association and by-laws of the

Company,

22.3.4 Instruments creating a charge or right on the

Company‟s assets,

22.3.5 Related party contracts and any other document as

the Authority may decide upon payment of a

prescribed fee.

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Article 23- Access to Information

23.1 The Company shall include in its articles of

association and by-laws Procedures of Access to

Information to ensure that shareholders rights of

access to Company documents and information in

a timely manner and on a regular basis, are

preserved. The Access to Information Procedures

shall be clear and detailed and shall determine (i)

the Accessible Company Information including the

types of information that is made accessible on an

on-going basis to individual shareholders or to

shareholders representing a minimum percentage

of the Company‟s share capital, and (ii) clear and

express procedures to access such information.

23.2 The Company shall have a website where all

relevant information and public information and

disclosures must be posted. This includes all

information that is required to be made public by

this Code and any related laws and regulations.

Article 24 - Shareholders Rights with Regard to Shareholders’

Meetings

The Company‟s articles of association and by-laws shall

include provisions ensuring effective shareholders‟ right to

call for a General Assembly and be convened in a timely

manner; the right to place items on the agenda, discuss

matters listed on the agenda and address questions and

receive answers thereupon; and the right to make informed

decisions.

Article 25 - Equitable Treatment of Shareholders and Exercise of

Voting Rights

25.1 All shares of the same class, shall have the same

rights attached to them.

25.2 Proxy voting is permitted in compliance with

related laws and regulations.

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Article 26 - Shareholders’ Rights Concerning Board Members’

Election

26.1 The Company‟s articles of association and by-laws

shall include provisions ensuring that shareholders

are given information relating to Board Members‟

candidates including a description of candidates‟

professional and technical skills, experience and

other qualifications.

26.2 Shareholders shall have the right to cast their votes

for Board Member‟s election by Cumulative

Voting.

Article 27 - Shareholders’ Rights Concerning Dividend

Distribution

The Board of Directors shall submit to the General

Assembly a clear policy on dividend distribution. This shall

include the background and rationale of such policy in terms

of the best interest of the Company and the shareholders.

Section 1.02 Article 28 - Capital

Structures, Shareholders’ Rights, Major

Transactions

28.1 Capital Structures should be disclosed and

Companies should determine the type of

shareholders agreements that should be disclosed.

28.2 Companies shall adopt in their articles of

association and/or by-laws provisions for the

protection of minority shareholders in the event of

approval of Major Transactions where the said

minority shareholders have voted against such

Major Transactions.

28.3 Companies shall adopt in their articles of

association and/or by-laws, a mechanism ensuring

the trigger of a public offer or the exercise of Tag

Along Rights in the case of a change in ownership

exceeding a specific percentage (threshold) . The

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thresholds should take into consideration shares

held by third parties but under the control of the

disclosing shareholder, including shares covered

by shareholder agreements which should also be

disclosed.

SECTION VIII –STAKEHOLDERS RIGHTS

Article 29 – Stakeholders’ Rights

29.1 The rights of Stakeholders are to be respected.

Where Stakeholders participate in the corporate

governance arrangements; they shall have access to

relevant, sufficient and reliable information on a

timely and regular basis.

29.2 The Board of Directors shall ensure that the

Company‟s employees are treated according to the

principles of fairness and equity and without any

discrimination whatsoever on the basis of race,

gender, or religion.

29.3 The Board shall develop a remuneration policy and

packages that provide incentive for the employees

and management of the Company to always

perform in the best interests of the Company. This

policy should take into consideration the long term

performance of the Company.

29.4 The Board shall adopt a mechanism enabling

company employees to report to the Board

suspicious behavior, where such behavior is

unethical, illegal, or detrimental to the Company.

The Board shall ensure that the employee

addressing the Board shall be afforded

confidentiality and protected from any harm or

negative reaction by other employees or the

employee‟s superiors.

SECTION IX – CORPORATE GOVERNANCE REPORT

Article 30 - The Corporate Governance Report

The Board shall prepare an annual Corporate Governance

Report signed by the Chairman. This report shall include the

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Board‟s assessment of the Company‟s compliance with the

provisions of this Code. This Report shall be submitted to

the Authority on an annual basis and whenever required by

the Authority. The said Report shall be published and shall

include all information related to the application of this

Code, including notably:

30.1 Procedures followed by the Company in this respect;

30.2 Any violations committed during the financial year,

their reasons and the remedial measures taken and

measures to avoid the same in the future;

30.3 Members of the Board of Directors and its Committees

and their responsibilities and activities during the

year, according to the categories and terms of office

of said members along with the method of

determining the Directors and Senior Executive

Managers remuneration;

30.4 Internal Control procedures including particularly the

Company‟s oversight of financial affairs, investments,

and risk management;

30.5 The procedure followed by the Company in

determining, evaluating and managing significant

risks, a comparative analysis of the Company‟s risk

factors and discussion of the systems in place to

confront drastic or unexpected market changes;

30.6 Assessment of the performance of the Board and senior

management in implementing the Internal Control

systems, including identification of the number of

times when the Board was notified of control issues

(including risk management) and the way such issues

were handled by the Board;

30.7 Internal control failures or weaknesses or contingencies

that have affected or may affect the Company‟s

financial performance and the procedures followed by

the Company in addressing Internal Control failures

(especially such problems as disclosed in the

Company‟s annual reports and financial statements);

30.8 The Company‟s compliance with applicable market

listing and disclosure rules and requirements;

30.9 The Company‟s compliance with Internal Control

systems in determining and managing risks;

30.10 All relevant information describing the Company‟s

risk management operations and Internal Control

procedures.

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SECTION X- CODE ENFORCEMENT

Article 31 - Code Enforcement

31.1 The Authority shall issue decisions, interpretations,

circulars and guiding principles necessary to enforce

the provisions of this Code as and when it deems fit.

And oversee the appropriate implementation of this

Code including carrying out investigations,

verification of information, imposing sanctions,

fines, penalties and all other enforcement measures

under related laws and regulations.

31.2 The Authority may amend this Code from time to

time.

31.3 This Code shall come into force after issuance by

the Authority and publication in the Official

Gazette.

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Annex (1): GUIDELINES FOR THE NOMINATION OF

BOARD MEMBERS (Fit and Proper Criteria)

1. Fit and Proper Guidelines for the nomination of Directors (the

Guidelines) are made under clause (15.3) of this Code. They

outline a number of matters that the Nomination Committee

should usually consider, in determining whether a person is fit

and proper for membership of the Board.

The qualifications set out in these Guidelines should not be deemed

to be exhaustive. They should be interpreted as complementing the

provisions of applicable laws and regulations, and other relevant

regulatory conditions.

These Guidelines should be read in conjunction with the Code.

2. Definition of “fit and proper”

A person who is fit is a person who is financially sound. And a

person who is proper is a person who is reliable because he enjoys

good personal qualities such as professional competence, integrity

and good reputation.

The Nominations Committee shall, in assessing a person‟s fitness

and properness, take into consideration the following:

(a) Financial position;

(b) Educational or other qualifications, or experience having

regard to the nature of the functions to be performed;

(c) Ability to carry out the activity competently, honestly and

appropriately; and

(d) Reputation, character and integrity.

The above qualifications must be considered in respect of the

person (if the nominated person is a natural person) or a company

and any of its officers (if the nominated person is a legal person).

a) Evaluation of Fitness (Financial status)

The Nomination Committee is not likely to be satisfied that a

person is a fit person if that person:

1. In the case of a natural person:

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(1) Is bankrupt or financially insolvent and has not been

discharged, or is currently subject to bankruptcy proceedings

or is a bankrupt who has been discharged within the previous

three (3) years

(2) In considering whether to nominate a bankrupt person who

has been discharged, the Nomination Committee would have

regard to the circumstances of the discharge and whether the

date of the discharge was recent.

(3) The Nomination Committee should have regard to the

circumstances of the failure to meet a judgment debt and

where a person has been associated with an entity that

became insolvent, went into administration, was under the

control of a Court appointed liquidator or otherwise failed to

meet its financial obligations to creditors or beneficiaries,

that person‟s competence, honesty and integrity may be

brought into question. This may not necessarily mean that an

instance in a person‟s past (for instance, where their

association was at a very junior level) would rule them out.

The Nomination Committee can enquire further into the

matter to establish whether or not the circumstances reflect

on the person‟s probity or competence as it is important for

the Nomination Committee to be aware of any such

instances, even where they make a decision to nominate such

person.

2. In the case of a legal person:

(1) Is subject to receivership, administration, liquidation or other

similar proceedings;

(2) Has failed to meet any judgment debt;

These requirements are aimed at identifying companies of

dubious financial status or solvency. As with the same

requirements in respect of individuals, the Nomination

Committee would have regard to the circumstances of the

failure to meet a judgment debt and the date of the act;

(3) Is unable to meet any capital requirement applicable to it;

and

(4) Is unable to meet any financial regulatory requirement

applicable to it.

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(b) Evaluation of Properness

Properness is assessed with reference to the person‟s academic and

industry qualifications together with relevant experience. Persons

should have the skills, knowledge and professionalism necessary to

perform their duties. The level of knowledge expected varies

according to the level of responsibility. Persons are generally

expected to be able to display an understanding of:

(1) The general structure of the regulatory framework that

applies to the Company‟s proposed activities;

(2) The legislations, laws, principles, and supervisory rules

specific to stock markets;

(3) The obligations owed to clients and the general obligations

owed to their principals or employers; and

(4) The financial products they deal in or advise upon and the

market in which the service is provided.

(5) A person has to demonstrate the ability to carry on the

regulated activity competently, honestly and fairly; and in

compliance with all relevant laws, codes and guidelines

promulgated by the QFMA and other regulators (where

applicable). The Nomination Committee is not likely to be

satisfied that a person is a proper person if that person:

In the case of a natural person:

(1) Is of unsound mind; or

(2 ( There is evidence of his incompetence, negligence or

mismanagement. Evidence may include the person having

been disciplined by a professional, commercial or regulatory

body; or dismissed or requested to resign from any position

or office for negligence, incompetence or mismanagement;

In the case of a legal person:

(1) Has Board Members or key personnel (such as managers,

officers, Board Member, and Executive Manager),

substantial shareholders or other controllers who fail to

meet the Properness Guidelines;

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The Nomination Committee believes that all persons

involved in the management or control of licensed

corporations and registered entities must be honest and fair.

(2) Has failed to demonstrate that it is competent to perform

the regulated activities efficiently and effectively; and

(3) It lacks the infrastructure and internal control systems to

manage risk effectively, avoid conflict of interests and

provide a proper audit trail.

(c) Reputation, character, reliability and financial integrity

The Nomination Committee is not likely to be satisfied that a

person is not proper if that person:

1- In the case of a natural person:

(1) Has a poor reputation, or is not trustworthy or lacking in

financial solvency;

(2) Convicted by a court or other competent authority for fraud,

dishonesty or breach of law;

(3) Is convicted of a criminal offence or is the subject of

unresolved criminal charges which are of direct relevance to

properness;

(4) Censured, disciplined or disqualified by any professional or

regulatory body in relation to any trade, business or

profession;

(5) Refused or restricted from the right to carry on any trade,

business or profession for which a specific license,

registration or other authorization is required by law;

(6) Disqualified by a court of competent jurisdiction from

being a Board Member;

(7) Found guilty of market misconduct by QFMA or another

regulatory body , or failed to comply with any codes and

guidelines promulgated by QFMA, other regulators or any

relevant exchanges in Qatar or overseas (if applicable);

(8) A Board Member, substantial shareholder, or manager of a

Company or business that:

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(a) Was wound up (otherwise than by a voluntary dissolution

unrelated to solvency) or was otherwise insolvent or had a

receiver or administrator appointed;

(b) Was found guilty of fraud;

(c) Has not met all obligations to clients, compensation funds

established for the protection of investors, or inter-member

guarantee funds;

(d) Has been found to have committed the acts described in (2)

or (3)or (4) or(5) or (7) above.

(9) Has been a party to an insolvency arrangement or entered

into any form of compromise with a creditor involving a

considerable amount.

2- In the case of a legal person:

(1) Was found to be of poor reputation or reliability, or lacking

in financial integrity. Similar considerations will be given

to the events described in (c) (1), (2), (3), (4), (5), (6),

(7),(8) and (9) above;

(2) Has been served with a winding up petition.

3. Continuing requirements:

A person or a company appointed as a Board Member or a

nominee member, respectively, must continue to comply with these

guidelines.

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Annex (2):Board Charter Form

1. The Board Charter may be part of the Company‟s by-laws.

2. The Board Charter sets forth the rights, obligations, duties and

responsibilities of Board Members and should cover at least

the following aspects:

(1) The required knowledge and skills, training, and information

that Board Members should have;

(2) Board Members‟ duty to protect the Company‟s interests and

the duty of loyalty to the Company;

(3) Board Members‟ conduct:: confidentiality, conflict of

interests, and transparency of transactions concerning the

Company‟s securities;

(4) Board Members‟ duty to speak out, and their independence of

mind;

(5) Board Members‟ duty to be available for and regularly attend

and actively participate in Board meetings and Shareholders‟

meetings;

(6) Board Members‟ duty to care for the Company‟s interests and

the duty of loyalty to the Company and the duty to comply

with the corporate authority granted by the Company;

(7) The criteria for the determination of attendance fees.

3. In setting forth the Directors‟ Duties, the following

guidelines should be taken into account:

3.1 Directors Duty of Care:

3.1.1 In faithfully discharging their duties, each Board Member

must act in good faith and exercise the same care and

diligence which an ordinary, prudent person would exercise

in taking care of his own money under similar

circumstances, and reasonably act in the best interests of the

Company.

3.1.2 A Board Member must take reasonable steps to be fully

aware of all relevant issues, including engaging in due

diligence, such as consulting outside independent experts

when appropriate, and to make informed and independent

decisions when voting on Company matters. In addition to

the obligation to be informed on Company decisions and

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matters, the duty of care also requires Board members to

take reasonable steps to monitor the Company‟s

management and finances.

3.1.3 Every newly elected Board Member shall upon his/her

election become familiar with the Company structure,

management and all other information enabling the said

Board Member to assume his/her responsibilities.

3.2 Directors Duty of Loyalty upon Conflict of Interests and

Related Party Transactions:

3.2.1 Board Members owe a Duty of Loyalty to the Company and

its Shareholders. This fiduciary duty requires Board

Members to subordinate their personal interests to the

interests of the Company and its Shareholders and at all

times act in good faith.

3.2.2 In addition to complying with the procedures and guidelines

concerning Related Party Transactions, to fully discharge

their duty of loyalty, all Board Members should refrain from:

(1) Entering into a transaction with the company where the

Board Member or a member of his family, or a business

associate or any other party closely affiliated with the

Board Member, has a financial interest in the Company;

(2) Carrying out activities which compete with the financial

interests of the Company, including engaging in a

competing business. However this paragraph does not

prohibit a concerned party from owning less than 10% of

a listed company or instances where the conflict is

disclosed and expressly approved in accordance with the

law, rules or regulations;

(3) Usurpation of an opportunity which rightfully belongs to

the Company unless the opportunity is first offered to,

and rejected by the Company;

(4) Apparent, likely, and actual conflict of interests. In the

instance of such a conflict of interests involving a Board

Member, the concerned Board Member must fully

disclose the conflict, and refrain from voting on, or being

present, when any matters related to the conflict are

brought to a Board vote;

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(5) Any action which leads to granting a preferential personal

loan when similar loans and loan terms are not offered to

the general public; and

(6) Any action which constitutes an insider trading or

otherwise improperly disclosing confidential Company

information.

(7) Any action or transaction that is not compliant with

relevant laws and regulations.

3.3 Board Members Duty to Comply With the Corporate

Authority

Board Members must act within the scope of the authority

entrusted to them under the Company‟s articles of incorporation,

duly enacted Board directives, shareholder resolutions, and related

laws and regulations. Board Members acting outside the scope of

their authority shall be liable for Company losses suffered as a

result of such unauthorized actions.